Rasul, Imran; Sonderegger, Silvia - In: Games and Economic Behavior 68 (2010) 2, pp. 781-788
We consider a principal-agent model of adverse selection where, in order to trade with the principal, the agent must undertake a relationship-specific investment which affects his outside option to trade, i.e. the payoff that he can obtain by trading with an alternative principal. This creates a...